Thursday, November 03, 2011

Abercrombie & Fitch Growing Fast Thanks To Ecommerce

Abercrombie & Fitch is growing fast those past few years. They have undertaken an ambitious online strategy, in order to grow the share of revenues coming from Internet sales. And the results are great:

  • Web sales increased 30.2% $207.9 million from $159.7 million in the first two quarters of 2010.
  • Total sales grew year over year 22.4% to $1.75 billion from $1.43 billion.
  • Net income increased 641.6% to $57.1 million from $7.7 million in the first two quarters of 2010.
Internet Retailer projects the web accounted for 11.9% of total sales compared with 11.2% in the first two quarters of 2010.
It is very interesting to see that Ecommerce is in the heart of Abercrombie success. We also knows that the company is seeking for international growth, as their recent launch in France shows.
This is the reason why I wonder: Could Abercrombie leverage its Ecommerce skills in order to grow fast? Creating a retail network is very long and pricy for a company which wants to land in another country, especially when it is a mature market, like France. And maybe leveraging Internet sales before a true store chains could be a new innovative strategy retailers should envision. 
We see more and more Ecommerce companies developping links with the mortar industry, either by setting up partnership in order to provide new delivery possibilities to customers, or simply by undertaking a true strategy of creating actual stores.

This is probably the reason why Abercrombie's French website is actually an online shop. It will be interesting to follow, but I am sure that Internet sales will count for a large part of French revenues in the first couple of years.
It could be very interesting for large companies to master the Internet sales channel, in order to leverage it in other countries. 

What do you think about it?